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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: I don't own a REIT in my portfolio. Do you think now is a good time to buy a REIT that may be beaten up and are REIT's looking good for the coming years with expected lower interest rates? What is your fav REIT you would buy right now, I like high ROIC if possible but open to your advice. Thx
Read Answer Asked by Adam on March 04, 2020
Q: Good morning 5i
H&R owns a 33% interest in ECHO, a privately held real estate and development company that owns a portfolio of grocery-anchored shopping centres in Pennsylvania and Ohio. H&R receives updates on ECHO's results "one month in arrears".
Does 5i have any information on the quality of this portfolio, and/or on the financial strength of H&R's partners? Does 5i view ECHO as a solid piece of H&R's overall asset base, or more of a question mark?
Thank you for your input.
Edward
Read Answer Asked by Edward on March 03, 2020
Q: Artis Reit's strategic review seems to have drummed up some interest from more than one party including management (Not sure if that means they would want to take the company private, perhaps you could elaborate on that as well). Management I believe has quite a bit of "skin in the game" and they seem to think the shares are cheap because they are trading so much below NAV. What is your expert opinion? Is AX.un a good takeover candidate? On a side note, how reliable are real estate NAVs? I assume the price of all the real estate is valued if everything was sold on a orderly basis so that maximum value could be extracted, as opposed to rapid liquidation. I guess a more precise question I am asking is, "Are real estate NAVs realistic or can they be inflated?" The fact that Artis is buying back so many shares makes me think management is confident that the share are undervalued. I guess the 5 cent per month dividend gets easier to pay when they reduce the share count.
Read Answer Asked by Paul on March 03, 2020
Q: Hi 5i Team,
I am looking to fill up my RRSP with NYSE listed US dividend stocks and US Reits over the next few weeks. What would be your six top picks in order of preference for each? I am an income portfolio investor, looking for a decent dividend, with some growth potential with stocks that are currently "on sale". Also, if you could suggest one ETF for both US listed Div Stocks and US Reits. Thank you!
Read Answer Asked by Pat on March 02, 2020
Q: Thoughts on the ETF REM? I know you are focused on Canada, but would I lose withholding taxes on dividends since this is the US? Likely would be held in RRSP.

thank you.
Read Answer Asked by Marilou on March 02, 2020
Q: Tricon announced results and to my untrained eye they look pretty good. One statement in the release caught my eye and am wondering as to the meaning of it. Below is the excerpt.

"In January, 2020, the company substantially completed its transition to an owner and operator of diversified rental housing in North America and therefore ceased to be an investment entity under IFRS 10.

As a result, effective Jan. 1, 2020, the company will begin to consolidate the financial results of controlled subsidiaries, including its investments in single-family rental homes, U.S. multifamily rental properties and certain Canadian multifamily rental properties, resulting in the introduction of these subsidiaries' assets, liabilities and non-controlling interests to the balance sheet of the company. Similarly, these subsidiaries' income and expenses will be reported on the company's statement of comprehensive income, together with the non-controlling interests' share of income.

The company continues to assess the impact on its consolidated financial statements of ceasing to be an investment entity, and final conclusions have not yet been made. The anticipated changes are material and will be applied on a prospective basis.

What does the fact that the company is no longer an investment entity under IFRS 10 and subsequent balance sheet changes mean for the company. Is this good or bad

Thanks Kenn
Read Answer Asked by Kenneth on February 27, 2020
Q: In a response to Manish on Feb 20 you said occupancy was 98.2%. In reviewing SIA's report, this figure refers to LTC occupancy. It appears that total property occupancy was 87.9% in 2019, down from 91.7% in 2018. Could you clarify which figure is the appropriate one to use. Also, how does total occupancy and any yearly change compare to the other major players in senior residences.
Thank-you, Grant
Read Answer Asked by grant on February 24, 2020
Q: Just a comment about a previous question regarding increased cost for Reit's for insurance, cost are going up and whether increased rents will cover these increases could effect the bottom line. Below is an excerpt of a condo in BC.

The president of another Lower Mainland strata council is speaking out after getting served with a sky-high hike to his building’s insurance.
Mike Pauls lives in a year-old 26-storey building on Gladwin Road in Abbotsford — a structure so new, it doesn’t even show up in Google Street View.
In 2019, the building paid a $66,000 premium through insurance broker BFL. Last month, the strata council got its bill for 2020: A whopping 780 per cent increase to a premium of $588,000.
“Our jaws kind of dropped to the floor,” said Pauls.
Read Answer Asked by fwb181 on February 21, 2020
Q: Gentlemen,
I hold the above four REIT's. I plan to sell REI.UN. With the proceeds and new cash I would like to increase the HR.UN and BPY:US positions and add two additional REIT's. For these I am considering DIR.UN, FCR.UN, IIP.UN. or any of your suggestions. These 5 REIT's would represent 10% of my portfolio.
I appreciate you input.
Thank you,
Werner
Read Answer Asked by Werner on February 21, 2020
Q: Hello,

In B.C. and Alberta, Condo Stratas are having difficulty obtaining insurance or insurance premiums are increased substantially. This appears due in part to some insurers leaving B.C. and the value of the properties increasing over the last several years making replacement cost expensive.

Would the REITS that operate in Western Canada have similar issues? I’d be concerned with owning a REIT that runs rental apartments but can’t get insurance on the building.
Looking at particular at CAR.UN and REI.UN.

Thanks
Read Answer Asked by Sarj on February 20, 2020
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